Runway tells you how much time a company has before it proverbially “crashes and burns” or for the more optimistic, how long it has to “get off the ground”. This means, how many months can the company continue to cover overhead and salaries before it runs out of cash and needs to close down. Hopefully the company will either reach cash flow break even, or some sort of inflection point in growth that will encourage follow on investment before that point.

As an early stage investor, finding a great company is only half the battle. As in life, in investing “it takes a village” as they say. And that is why companies are very careful about who they invite to be on the cap table. Certain investors can add a lot of strategic value to a startup, providing the “grown up in the room” to young teams by harnessing their experience through service on the board or in an advisory role.

Unless you want to be single handedly responsible for driving the growth of the company and an eventual liquidity event, make sure you have some high quality co-investors in the round. Beyond the ability to use their experience to help your founding team avoid startup pitfalls, experienced value add investors can also help the company find funding for follow on rounds.